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I’ve been kind of struggling over whether or not to write this. Partly because it comes off as something of a “woe is me” kind of post and partly because it looks like an excuse, but in reality it’s just me being frustrated and venting. So, hi, I have a blog.

Well, it IS something of a “woe is me” post, I guess. But, here goes.

Here at Mystery, we use a lot of specialty malts. You could probably argue that the only thing that we use is specialty malt because we don’t use any base 2-row malts. All of our base grain is either Pilsner Malt or Maris Otter depending on the style. For a handful of our brands throughout the year, we use very specific malts because of a very specific flavor we get from it.
Let me explain that last sentence. One some very base level, malt is malt. The Cara malt from Crisp will get me the same basic flavor as the Cara malt from Simpsons, which will get me the same basic flavor as the Cara malt from Patagonia or a blend of Crystal 10 and Crystal 20 from Briess.

It’s not entirely true. They all have their own character, but when blended into an overall beer the only people who are really noticing those things are the people inside the brewery that have been around since last year’s run of the same beers and have tasted them a LOT. That’s just 3 of us, really.

We have some ingredients, however, that have very specific characters that we feel aren’t reproducible in other malts. The one that specifically jumps to mind for me – primarily because I’ve been having a problem with it – is Simpsons Golden Naked Oats. It is, without a doubt, one of the primary driving flavors in Six Impossible Things, our Chocolate Breakfast Stout (and pretty much our most popular beer). I haven’t been able to find anything that tastes the same. We have a handful of grains like that. They’re normally from small foreign producers. You’re probably already guessing what I’m going to write about.

This winter in particular, our supply chain has been a complete disaster. We’ve had orders come in wrong, we’ve had orders get lost, we’ve had deliveries show up a week late. It’s been one thing after another. In the case of our oats, we bought the last few bags in the entire Southeast in mid-January after being out for the better part of a month. I had to buy two more bags from a homebrew shop to do another batch of beer. As near as I can tell there are no Golden Naked Oats in the US. Anywhere.

The container that the oats are supposed to be in left England (which, of course, has been experiencing catastrophic flooding) late. It got caught in a storm on the Atlantic Ocean. Twice. It was finally supposed to arrive this week just in time for the winter storm that hit this weekend. Once it finally gets unloaded and goes through customs it has to take a truck to Minnesota where it’ll get portioned out to more trucks who will then get it to warehouses around the country around a week after that at which point I will finally be able to order it ASSUMING that order is handled correctly.

So what’s the result? The result is that I stop producing my most popular seasonal beer because I, quite literally, cannot do it. It’ll be weeks or longer before I get it back out in the market, at which point it’ll be mid-spring and totally out of season. It’s frustrating.

So, why the bitch session? Because nobody can see it. To my distributor, to bars and restaurants, to customers in my pub, I’m just not making enough beer, and I’m not making enough of something that will make all of them happy, too. It’s an excuse. What do you mean you can’t get oats? I can go get Quaker Oats at the grocery store and bring you some.

No, you can’t.

And I feel very responsible for the fact that every piece of the chain below me is disappointed, and I feel, too, that I have no recourse in the supply chain above me. Not just for this instance, but for anything.

What am I going to do? Not order again from my largest supplier? Hold them financially responsible for the fact that I’m losing business because they can’t get an order right? What leverage does a small brewery really have? We can’t order in all of the grain for the year up front. We don’t have that kind of cash, much less that kind of storage space. I would imagine that most small breweries are in the same boat that I am.

In a lot of ways, this seems like it would be so much worse if I had a flagship. At least now I can call it quits on a brand and move on to the next season, better luck next year. What happens if you have one of these things happen to your flagship? You change the recipe? Change the flavor? Screw consistency?

So, the next time you see a brewery with what looks like supply problems, maybe think a little bit about how supply chain makes a difference.

Since Mystery Brewing Company‘s appearance on Crowd Rules in May and the introduction of our brand idea on a national scale, I’ve seen a fair amount of discussion online (and in my inbox) about our “no flagship brand” model with varying degrees of agreement or disagreement. I thought it might be a fine time to talk about what seasonal-only brewing means to us, how we do it, why we do it, and why I think that it’s the future of craft beer.

Why seasonal-only?

It’s easy: people love seasonal beers.

This idea didn’t just come fully formed into my head. Back when I attended my first Craft Brewer’s Conference, one slide during Paul Gatza’s State of the Industry presentation kept sticking in my head. I might get into a bit of trouble by pulling this slide out of an industry-only presentation, but here it is from 2013. It’s looked pretty much the same way for the past 4 or 5 years:

Taken from CBC 2013 State of the Industry presentation

Seasonal: #1.

And, yes, IPA is coming up strong because IPA, but you’ll notice that the other big climber is “Variety.” These trends look the same year after year and they read to me like this:

People are no longer brand drinkers. They’re portfolio drinkers.

It’s always amusing to me that an industry that spends so much time trying to define itself as “not industrial lager” bases its primary business model on the industrial lager model, which is the flagship model: Make one beer, make it well, make it as cheaply as possible, use other brands to keep competitors off the shelf.

There’s two obvious reasons why this model has worked so well and why it’s been adopted by the craft industry.

In the early craft market, when there wasn’t a lot of brand recognition for craft beer, much less craft brands, it was a lot easier – and better for business – to emulate the big brewery model. In the 1980s and even the early 90s, it was necessary to have big iconic craft branding to stand apart from and against the industrial lagers.

It’s the way distributors operate. Distributors are built around selling core brands and selling them well. Since distribution was key in the growth of craft across the country, craft breweries adopted the flagship model in order to move their beer.

But this isn’t your daddy’s beer industry any more and drinkers have moved on from the core brand model. A quick look at Rate Beer, or Beer Advocate, or Untappd – or even the fact that those sites exist – will show you. Very few craft fans buy one brand and drink that one brand. Drinking variety is a badge of honor, sometimes even literally.

A few years back, when I was just getting into the beer industry, I saw the results of a survey that showed that when people had a beer that they identified as their favorite – a brand that they were loyal to – they bought that beer, on average, once per month. The same survey showed that they consumed beer several times per week, and often 2 – 3 beers at a time. Some loyalty, huh?

(I really wish I could find that survey and link to it and/or see the results of those questions today.)

The young members of the drinking market – the kids just turning 21 years old – have something that their predecessors never had: vast variety. Any young drinker that walks into a beer store today is faced with not 10, not even 100, but thousands of varieties of beer. I can get 55 different pale ales at the store near my house. And that brings me to two different questions:

1) How could anybody choose just one of those without trying a ton of them?
2) With that much competition already in the market, why on earth should I make a pale ale?

If you’re a craft drinker, ask yourself these questions: When was the last time you weren’t interested in trying something new from a brewery you like? When was the last time you didn’t want to try something from a new brewery? When was the last time you bought the same beer more than a couple of times in a row?

See? It’s happening to you, too. Variety is king.

What we mean by seasonal-only brewing

Based on that information, I decided to pursue the idea of seasonal-only brewing. There were a couple of different facets to the decision. One of them was to capitalize on the fact that people enjoy variety and enjoy seasonal beers. It’s what people buy the most, and so it seemed natural that they would also buy our seasonal beers. The other was to differentiate our brands, and not just make another golden, pale, amber, porter, stout, IPA lineup, but to actually fit into the niches that were open in an already-crowded beer market.

One of the main misconceptions about our model is that we’re just flying by the seat of our pants and have no idea what’s coming next. In reality, we have a set schedule that we brew by that is based on both style and season. It works like this:

Click for a larger version of our seasonality chart.

We have four style categories that we brew in: Session, Hop Forward, Saison, and Stout.

Each season we make something seasonally appropriate within that category, and we repeat that beer each year. So, just like every other seasonal brand in the country, each beer comes out once/year, is consistent with how it tasted last year, and will be back again next year when it is again seasonally appropriate.

You can click into the graphic, but I’ll break down the styles for you here in text.

On top of that, we also do more limited seasonals, one-offs, experimental, and barrel-aged brews. Since it seems weird to call a beer a seasonal at a seasonal-only brewery, we release them in a line we call our Novella Series. Some of them are truly one-and-done. Some of them we’ll make again. Some of them are candidates for future categories as we expand. Basically, these are where we’re trying our new recipes and styles. Now that we have an operating taproom, many of these go on tap there and there only, but we still like to be able to get special one-offs into the market in keg format.

Challenges to the model

There are, no doubt, many challenges to this model. I anticipated some of those challenges, and some of them caught me by surprise.

I, like most crazy founders of things that don’t really exist, thought that the brilliance of my idea would be self-evident and that people would immediately understand what the hell I was talking about. In reality, we opened the brewery to confusion about our model and it’s still one of the most significant challenges we face (which is at least one of the reasons I’m writing this article).

As it turns out, the most common question you’re asked as a new brewery is, “What’s your flagship?” When you have an answer that’s a paragraph and not a sentence, people aren’t excited to listen and that’s because – as I was surprised to find out – most of the people who are buying beer at bars and restaurants don’t really care about beer.

I will almost definitely catch some sort of flak for that, but it’s true and, what’s more, it will always be true. You can almost definitely say the same thing about wine, liquor, chocolate, hot dogs, or any other specialty product. Because the people who are most likely making these decisions are making a myriad of different decisions and purchases, and they’re just not excited by the nuances of the brewing industry, nor should they be. They want to make an easy decision about one small facet of their operation and then get along to the next crisis in their day. Plain and simple, it’s not their job to care about the difference between your business model and the next guy’s. In many cases, beer is a set-and-forget kind of purchase. They will buy one brand until sales start to dip and then they will buy a different brand. If you go into a bar or restaurant with a brand that will go away on its own (or will appear to), then it looks to them like you’re just giving them more work.

We’ve honed our elevator speech, we’ve made charts and graphics and flyers, and we’re continually working on more ways of getting information out to bars and restaurants on a regular basis. Still, our largest challenge is defining our business to the customer in a way that they easily understand. We have a hard time convincing bars that they could just, say, always keep our stout on tap and that it creates variety in their lineup for them without any further work on their part.

The same goes for our relationship with our distributor. We’ve had a great time with our distributor, but we’ve found out the hard way that we were not providing enough information to their reps in order to best sell our beer. Sales reps fall in the same place as bar managers and beer buyers. We are just one brand in their book. If they don’t have a good understanding of what that beer is, what it tastes like, or why it changes, it’s a lot easier to sell something else. We’ve had to come back into the brewery and make changes in how we are handling information and what we’re expecting from sales. It was our assumption that beer reps working for our distributor would naturally be interested in learning more about the product and representing it correctly, but it’s a naive view of a crowded market. We don’t just make another pale ale, and if our beer is difficult for a rep to sell, they won’t sell it. After all, it’s just one small facet of their job.

Seasonal-only also contradicts how distributors are built to sell product. There is an onus in distribution to push the flagship brand of a brewery in order to qualify a retail establishment for inclusion on seasonal releases. To put it more plainly: If you, as a retailer, order a bunch of Crappy Golden Ale from Brewery X then you are virtually (but not legally) guaranteed that when Super Popular Imperial Stout comes out from Brewer X in the fall, you’ll get some. But if you don’t buy Crappy, you can kiss Super Popular goodbye. When all of your brands are seasonal, it’s hard to play that game.

Consistency is the challenge that I correctly anticipated. My feeling was that in order to get people to trust an ever-changing beer lineup, you have to make sure that the beer that’s going out is consistent within the brand and that it’s always great. Simply put: You cannot have your entire lineup change four times per year if half the beer you put out is sub-par. What’s more, the beer has to be consistent year-to-year, so that the flavor that customers loved last year is back again for their enjoyment.

We’ve put a lot of effort into making sure that we have an excellent lab and good science. We manage 95% of our own yeast propagation, we test every batch through the system for any sort of contamination, and we’re in the midst of starting a tasting panel program to make sure that flavor consistency isn’t just a decision between me and my brewer.

Why I think seasonal is the future of craft (specifically small craft) beer

All this said, I do believe that seasonality is the future of craft, and that these challenges – particularly the ones in which people don’t understand our business model – will fade away, precisely because more breweries will eventually buy into the idea.

If I were to polish up my crystal ball and tell you what I think the future of beer looks like, I think it goes a little like this:

Small craft brewers face a number of future challenges from both inside and outside craft.

The big guys are losing market share, and they know where it’s going.

MillerCoors just expanded their “craft” division. Tenth and Blake just got a fancy new building and I’m sure we’ll be seeing plenty of new MillerCoors-funded “craft” brands coming into the market. Anybody who isn’t concerned by that from a small business perspective should take a look at Blue Moon sales numbers and then taste the sours that are coming out of ACGolden’s barrels and think again.

This past year AB-InBev took what should look less like a warning shot and more like first volley in the purchase and proliferation of Goose Island. They can shore up loss of market share by purchasing and assimilating craft breweries and this act shows it. Aggressive corporate behavior and ruthless market dominance is what took them from prohibition to the best selling brand in the world and nobody should believe that they can’t, or won’t, make beer good enough to give any craft brewery a run for its money. Everybody should also remember that Budweiser was, at some point in history, a delicious, crisp, and well-made American pilsner.

These giants and their pocketbooks have considerable influence and sway with the distribution system, which most small brewers still depend on enormously without having robust protection from franchise law. Small brewers, in most cases, still play by the same rules as the large brewers when it comes to distribution because there are no exceptions for business size written into the law in most states. Unfortunately, 99.9% of small brewers don’t have the same financial sway that the makers of industrial lagers do. They are at an incredible disadvantage there.

Inside the craft industry, we’re building our own industry giants. Boston Beer, Sierra Nevada, New Belgium, and others are so far and away larger than most of the small breweries in States that it’s almost unfair to lump them in the same industry. When we talk about “the Big 3” we could just as well be talking about those three, since the three of them together make more beer than 98% of the breweries in the U.S. combined.

Regional and super-regional breweries continue to dominate the craft market through many of the same tactics used by the makers of industrial lagers: aggressive expansion and financial influence on local markets through event sponsorship. They get a pass from craft drinkers, though, because of two key reasons: 1) They’re still largely seen as small breweries (because in comparison to AB-InBev, they really are). 2) They make great beer.

However, as those companies continue to grow with a bevy of regional breweries behind them looking to follow in their footsteps, I find myself asking:

Can this country support 50+ super-regional breweries AND 3000+ small breweries? How long can we go before small breweries start going under because they can’t keep up with the big craft brands? How do I differentiate my company to allow it to survive?

I can’t play in the same space as these other breweries. I have neither the financial resources nor the desire to create a nationwide brand. What can I do to stop my company from being swallowed up? What advantage do I possibly have over any of these guys?

The answer is the same for any new small business: agility, creativity, innovation.

I’ll never be able to get my ingredients cheaper, I’ll never be able to make more beer than they can, have lower prices, have flashier advertising, or fancier new packaging. Our advantage – and the advantage of many other new breweries out there – is our small size. We can do things on a 7 bbl scale, that nobody would ever want to do on a 100 bbl system. Maybe because it’s a pain in the butt to manually quarter that many lemons, or maybe because finding a source for 500,000 jasmine flowers is unreasonable. It doesn’t matter why – it is.

The advantage to seasonality in a small brewery is that it takes advantage of what we do best: We make small amounts of really fresh beer, we make a variety of styles, we make them quickly, we make them well, and then they go away. We offer variety and exciting innovation in a marketplace that’s filled with overwhelming sameness. We offer exactly what drinkers are looking for, exactly when they’re looking for it.

Now, if only we can get everybody to understand that. Drinkers love the idea. Bars, restaurants, and distributors are following along, and soon, I hope, breweries will, too.

This podcast is designed as self-reference. Yeah, weird, right? Not really – I already know that down the road I’ll want to be able to talk about ingredients in a really specific manner and so this is a general overview of the five ingredients of beer so that I can point people back here.
Wait. What.. five?

Yeah. You heard me. You’ll have to listen.

This covers water polarity, hop bitterness, why IBUs are terrible (but metric!) measurements, what malting is, why barley is great, why “top fermenting” and “bottom fermenting” yeasts don’t exist, and what else can go into your beer. I also talk a bit about seasonality in ingredients and if you listen closely you can hear my dog squeak a toy and ask to go out in the middle of the podcast. Thanks Tess, can’t you tell I’m recording here?